In a random sample of 10,000 small business owners, the NFIB reports Staggering 50 Percent of Small Business Owners Report Job Openings They Can’t Fill.
- “Small employers are struggling to fill open positions and find qualified workers resulting in record high levels of owners raising compensation,” said NFIB Chief Economist Bill Dunkelberg. “Owners are raising compensation in an attempt to attract workers and these costs are being passed on to consumers through price hikes for goods and services, creating inflation pressures.”
- Up five points from July’s reading, 66% of owners reported hiring or trying to hire in August. A seasonally adjusted net 32% of small business owners are planning to create new jobs in the next few months, up five points and a 48-year record high reading. The 48-year historical average is 11%.
- Finding qualified workers remains a problem for small employers with 91% of those owners hiring or trying to hire reported few or no “qualified” applicants for the positions they were trying to fill.
- Thirty-one percent of owners reported few qualified applicants for their open positions and 29% reported none, a 48-year record high.
- Small business owners reporting raising compensation is up three points from July to a net 41% (seasonally adjusted) and a 48-year record high reading.
- A net 26% of owners plan to raise compensation in the next three months, down one point from July’s record high reading. Ten percent of owners cited labor costs as their top business problem and 28% said that labor quality was their top business problem, up two points from July and both record high readings.
Job Creation Plans
Qualified Job Applicants
- Sixty percent (91 percent of those hiring or trying to hire) of owners reported few or no “qualified” applicants for the positions they were trying to fill (up 3 points).
- Where there are open positions, labor quality remains a significant problem. Thirty-one percent of owners reported few qualified applicants for their open positions (unchanged) and 29 percent reported none (up 3 points), a 48-year record high.
Planned and Actual Compensation
- Seasonally adjusted, a net 41 percent reported raising compensation, up 3 points from July and a 48-year record high reading.
- Offering higher compensation is the main resource available for most small business owners to compete for applicants.
- Ten percent cited labor costs as their top business problem (up 1 point) and 28 percent said that labor quality was their top business problem, up 2 points from July and record high readings.
How Did Stimulus Impact Willingness to Work?
Wage Wars Underway
Wage wars for qualified talent are underway.
The NFIB report ties in nicely with my observation yesterday BofA Raises Minimum Wage to $21, Wage Push Inflation Will Kill Small Businesses.
Stagflation Light Might Strike as Early as the Third Quarter This Year
Despite the hiring plans and apparent shortages, the GDP forecasts are shrinking rapidly.
The GDPNow Real Final Sales forecast for the third quarter is -1%. That's the true bottom line as inventories net to zero over time.
It's interesting to see record breaking demands for labor just as actual sales forecasts dive. Then again, there are always shortages at the top of every market.
Is this it? I don't know, nor does anyone else. But if so, the Fed is in serious trouble with no way to cut rates.
Yet, recession seems to be on no one's mind.
Finally, the Covid-related distortions have been amazing. But the stimulus impact on growth is over already. Lagging inflation effects remain.
For further discussion of the stagflation and recession possibilities see my post Stagflation Light Might Strike as Early as the Third Quarter This Year.
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